Judgment :- (MFA filed U/S. 82(2) of the ESI Act against the order Dt. 28.10.2008 passed in ESI Application No. 34/2006 on the file of the ESI Court at Bangalore, dismissing the Application Filed U/S. 75 of the ESI act challenging the notices dated 3.11.2004 and 16/20.06.2006 issued by the ESI corporation.) Whether a Chartered Accountant’s firm comes within the expression “shop” for the purpose of Employees’ Insurance Act, is the question that has arisen in this appeal. 2. The appellant has been functioning as a Chartered Accountant firm since 1982 and in order to carry on the functioning of the said firm of Chartered Accountant, certain persons were employed from time to time and the appellant was issued with a notice by the E.S.I Corporation dated 3-11-2004 informing the appellant that the firm is coverable under the provisions of Employees State Insurance Act, 1948 (E.S.I. Act) with effect from 1-6-2004 and by another notice dated 20-12-2005 the appellant was informed to pay a sum of Rs.53,625/- being the contribution for the period from 1-6-2004 to 31-3-2005 on assumed wages of Rs.4,525/-per employee for 20 employees. Thereafterwards, there was exchange of correspondence between the appellant firm and the E.S.I. Corporation and the notice issued on 16/20-6-2006 directing the appellant to comply with the provisions of the E.S.I. Act ultimately led the appellant to approach the E.S.I. Court by way of an application under Section 75 of the E.S.I. Act. 3. Each side examined one witness and also placed reliance on several documents and after concurring with the materials placed by the parties and taking note of the arguments advanced on the decisions relied upon by the parties, the E.S.I. Court held that the Chartered Accountant firm run by the appellant is liable to be covered under the E.S.I. Act and in respect of the persons engaged by the firm, E.S.I contribution was also to be paid and with these conclusions the application filed by the appellant was dismissed, giving rise to this appeal. 4. Learned Senior counsel Sri S.N.Murthy, appearing for the appellant contended that the E.S.I Court was in error in taking the view that the appellant is coverable under the E.S.I Act and also committed an error in arriving at the conclusion that the Chartered Accountant’s firm run by the appellant comes within the expression of “shop”. 4. Learned Senior counsel Sri S.N.Murthy, appearing for the appellant contended that the E.S.I Court was in error in taking the view that the appellant is coverable under the E.S.I Act and also committed an error in arriving at the conclusion that the Chartered Accountant’s firm run by the appellant comes within the expression of “shop”. The learned senior counsel argued that being the professional firm, the appellant cannot be brought within the definition of the expression “shop” and though several decisions were cited before the E.S.I Court, in this regard including the decision of this Court in the case of Phillipos & Co., Vs. State reported in ILR 1989 Karnataka 3135 and other decisions, to contend that the firm of Lawyers or Chartered Accountant’s Firm does not fit into the expression “shop” of coverable establishment as defined under Section 2 (e) and (u) of the Karnataka Shops and Commercial Establishments Act, yet the E.S.I Court lost sight of the principle laid down in those decisions, but went on to hold that in the face of the evidence placed by the parties and in view of the number of persons engaged by the appellant’s firm during each period, the appellant comes within the ambit of the expression “Shop”. 5. It is argued that the said conclusion reached and the reasoning given by the E.S.I Court are contrary to the well settled position of law and even on facts the number of employees were less than 20 as E.S.I Court had wrongly included the security personnel also as an employee of the appellant’s firm. Placing reliance on the decisions in the case of M/s.Hindu Jea Band, Jaipur & the Regional Director E.S.I.Jaipur, M/s.Hindu Jea Band Jaipur Vs.State of Rajasthan and others (Special Leave Petition No.1743/1987); M/s. International Ore and Fertilizers (India) Pvt.Ltd., Vs. Employees’ State Insurance Corporation reported in 1988 LAB.I.C.333- AIR 1988 SC 79 ; the Regional Director, Employees’ State Insurance Corporation vs. Ram Chander reported in 1998 LAB.I.C 336- AIR 1988 SC 113 ; N.E.Merchant and Another v. State reported in AIR 1968 Bombay 283; V.Sasidharan vs. M/s Peter & Karunakar and others (C.A.No.2029 of 1980 dated 23rd August, 1984); Phillipos & Co. vs. State reported in I.L.R. 1989 Karnataka 3135; Employees’ State Insurance Corporation vs. M.M.Suri & Associates (P) Ltd., (C.A.No.5640/1997 dated October 28, 1998). Learned senior counsel Sri. vs. State reported in I.L.R. 1989 Karnataka 3135; Employees’ State Insurance Corporation vs. M.M.Suri & Associates (P) Ltd., (C.A.No.5640/1997 dated October 28, 1998). Learned senior counsel Sri. S.N.Murthy argued that the question of bringing the Chartered Accountant’s firm within the ambit of the expression “shop” therefore cannot arise. 6. It is then contended that even under the E.S.I Act no definition of “shop” is provided and therefore one has to fall back on the definition of the expression “shop” as contained in Standard dictionaries and also what is understood in common parlance. Therefore, the learned senior counsel contended that the entire approach of the E.S.I Court was contrary to the law laid down by the Apex Court in the aforementioned decisions and referring to the Division Bench decision of Bombay High Court in the case of N.E.Merchant and another vs. State (AIR 1968 Bombay 283), the learned senior counsel argued that it is now well established that the Chartered Accountant’s Act, 1949 has recognised that Chartered Accountants’ are practicing professional Accountants akin to that of profession of law and therefore to think that the Chartered Accountants firm is a “shop”, is inconceivable. 7. It is then argued that merely because, certain persons are engaged by a Chartered Accountant firm as employees that itself does not entitle the Chartered Accountant’s firm to be called as a “shop”. As such the Court below was in error in holding that the Chartered Accountant’s firm comes within the ambit of expression of “shop”. Referring to the decision of this Court in Phillipos Case (ILR 1989 Karnataka 3135) it is argued that this Court has taken a view in the said case that the office of Chartered Accountant of firm of Chartered Accountant’ would not come within the definition of “Shop” and so also the said activity would not fall within the expression of commercial establishment. Therefore, the question of Chartered Accountant’s firm coming within the purview of the E.S.I. Act will not arise. Even on facts it is contended that the evidence of A.W.1 in the course of his cross-examination if carefully perused, would make it clear that the number of persons employed were less that 20 if the security personnel is excluded and as such the profession of the appellant’s firm coming within the E.S.I. coverage will not arise. Therefore, the impugned order of E.S.I. Court be set aside by allowing this appeal. Therefore, the impugned order of E.S.I. Court be set aside by allowing this appeal. 8. On the other hand, Sri Narasimha Holla, learned counsel appearing for E.S.I. Corporation contented that the order of the ESI Court is not liable to be interfered with because the Court below found on facts that the appellant firm had engaged 20 persons during the months of June 2004 and having regard to the number of employees engaged by the appellant firm from time to time and also having regard to the salary paid to those employees, the ESI Court therefore was justified in holding that the appellant firm is liable to be covered under the provisions of the ESI Act. In this connection, learned counsel pointed to the evidence of AW-1 and to the observations of ESI Court at para 19 and 20 of the impugned order. 9. Apart from this, it was also submitted by Sri.Narasimha Holla that the activity carried on by the appellant firm also includes, filing the income tax returns, sales tax returns, preparation of the project reports and securing the PAN cards for their clients and for all these services fee was charged and therefore, when the appellant firm rendered services and collected fees in respect of the said services, the appellant firm falls within the expressions of ‘shop’ and therefore, the notice issued to the appellant firm and the contribution sought, is in accordance with law by the Court below. 10. 10. As against the decisions referred to by the learned counsel for the appellant, learned counsel for the ESI Corporation relied on the decision of the Apex Court in the case of ‘Employees State Insurance Corporation v. R.K.Swamy and others” ( AIR 1994 SC 1154 ) to contend that even the activity of advertising agency has been held to fall within the word ‘shop’ and in the said decision, the Apex Court also referred to the decision rendered in ‘Regional Provident Fund Commissioner v. Shibu Metal Works ( AIR 1965 SC 1076 ) wherein it was held that the Employees Provident fund Act being intended to serve a beneficent purpose, the Court should prefer the view which would help in achieving the object of the Act and therefore, referring to the aforesaid observations of the Apex Court, it is contended by the learned counsel for the Corporation that even in the case on hand also, the coverage of the appellant firm should be viewed from the angle of number of employees engaged by the appellant firm. 11. Therefore, it is argued that though Chartered Accountants by nature of their work come within the fold of profession, yet from the employees angle, the firm will have to be treated as ‘shop’ so that the employees who work in the Chartered Accountant’s firm are not deprived of the benefits of the ESI Act. Another point put forward is that the employees as such do not carry on any professional job unlike the Chartered Accountant but on the other hand, the employees carry on the routine work and therefore even for this reason also the coverage of the employees will have to be upheld having regard to the object behind the ESI Act. It is also contended that the decision of this Court in the case of Phillipos & Co. referred to by the appellant counsel was in the context of Karnataka Shops and Commercial Establishments Act but not under the ESI Act and as such the referred decision also cannot be pressed into service by the appellants. In the light of the aforesaid submission, learned counsel Sri.Narasimha Holla for ESI Corporation, sought for the dismissal of the appeal by confirming the order of the ESI Court. 12. In the light of the aforesaid submission, learned counsel Sri.Narasimha Holla for ESI Corporation, sought for the dismissal of the appeal by confirming the order of the ESI Court. 12. Having thus heard the submissions and taking note of the decisions cited by both sides, the point for consideration is: “Whether the appellant firm can be held to be a “shop” for the purposes of ESI Act?” The answer to the said question would also decide as to whether the appellant firm is liable to pay the contribution in respect of its employees. 13. The basis upon which the ESI Corporation has sought to cover the appellant’s firm is the gazette notification dated 5.1.1985 and the said notification provides that the ESI Act shall extend to the categories that are mentioned under Column No.1 and at Sl.No.3 “shops” finds a place along with the other classes like road motor transport establishments, cinema theatres (including preview theatres), newspaper establishments which were employing 20 or more persons on any day of preceding 12 months. Therefore, we will have to find out as to what is the definition of “shop”. This takes us to the ESI Act. A look at various definitions that are mentioned in Section 2 of the ESI Act makes it clear that the Act does not provide any definition for the word “shop”. In the absence of the ESI Act defining the word “shop” what is best course to be adopted is the next question. 14. The definition of “shop” came up for consideration before the Apex Court in the case of ‘M/s. International Ore and Fertilizers (India) Pvt.Ltd., V. Employees’ State Insurance Corporation’ ( AIR 1988 SC 79 ) and the Apex Court gave the following definition of the word “shop”. .“4….. The word “shop” is not defined in the Act or in the notification issued by the State Government. According to the Shorter Oxford English Dictionary the expression “shop” means “a house or building where goods are made or prepared for sale and sold”. It also means a “place of business” or “place where one’s ordinary occupation is carried on”……” 15. Where a statute does not define a word, the meaning of the word will have to be understood from the popular sense in which the said word is used. It also means a “place of business” or “place where one’s ordinary occupation is carried on”……” 15. Where a statute does not define a word, the meaning of the word will have to be understood from the popular sense in which the said word is used. This is the view taken by the Apex Court in the case of ‘The Commissioner of Income-Tax, Andhra Pradesh v. M/s Taj Mahal Hotel, Secunderabad’ ( AIR 1972 SC 168 ). The relevant paragraph which will have to be referred at this juncture is para 6, wherein the Apex Court has observed thus: “6. Now it is well settled that where the definition of a word has not been given, it must be construed in its popular sense if it is a word of every day use. Popular sense means ‘that sense which people conversant with the subject matter with which the statute is dealing, would attribute to it’. In the present case, S.10(5) enlarges the definition of the word “plant” by including in it the words which have already been mentioned before. The very fact that even books have been included shows that the meaning intended to be given to “plant” is wide. The word “includes” is often used in interpretation clauses in order to enlarge the meaning of the words or phrases occurring in the body of the “statute”. When it is so used, these words and phrases must be construed as comprehending not only such things as they signify according to their nature and import but also those things which the interpretation clause declares that they shall include. The word “include” is also susceptible of other constructions which it is unnecessary to go into.” 16. Having regard to the aforesaid view expressed by the Apex Court, if we are to construe the word, “shop” in the popular sense, can it be said that a firm of Chartered Accountants fits into the word “shop”? As far as Chartered Accountants’ profession is concerned, while dealing in the case under the Karnataka Shops and Commercial Establishments Act, 1961, a learned Single Judge of this Court in ‘Phillipos & Co. As far as Chartered Accountants’ profession is concerned, while dealing in the case under the Karnataka Shops and Commercial Establishments Act, 1961, a learned Single Judge of this Court in ‘Phillipos & Co. V. State” (ILR 1989 KAR 3135) has observed that the Chartered Accountants carries on the profession which requires prescribed qualifications, subject skills, professional equipment or knowledge and the performance of the functions of a Chartered Accountants and his duties is analogous to the functions and duties of a Lawyer or a Solicitor. It was further held that the requirements of learning, skill and integrity for carrying on of a profession would make it clear that the office of a Chartered Accountant or firm of Chartered Accountants cannot be regarded as premises where services are rendered to customers. The Court further went on to hold that the definition of “shop” in Section 2(u) of the Karnataka Shops and Commercial Establishments, 1961 would clearly envisage an activity which is understood as associated with carrying on the trade or commerce and cannot take in premises where professional services are rendered and therefore, held that the office of a Chartered Accountant or of a firm of Chartered Accountants is not the “shop” within the meaning of Section 2(4) of the sad Act. 17. The profession of Chartered Accountants was also the subject matter of a decision by the Bombay High Court in the case of ‘N.E.Merchant & another v. State’ (AIR 1968 Bombay 283) wherein a Division Bench of the Bombay High Court while dealing with the Bombay Shops and Commercial Establishments Act, held that the office of a Chartered Accountant with articled and salaried ordinary clerk, is not commercial establishment and in the course of the said decision, the court also considered the word “profession” and held thus: “The Chartered Accountants Act, 1949 has now statutorily recognized that the activities of a chartered accountant, are not a mere business or trade, but a profession and this is clear from the various provisions that have been made in that Act to lay down the standard of qualifications for a chartered accountant and standards of conduct when practicing as a chartered accountant. The stringent restrictions that have been placed on him are only a measure of the integrity that should be displayed by the chartered accountant in the practice of his profession. The stringent restrictions that have been placed on him are only a measure of the integrity that should be displayed by the chartered accountant in the practice of his profession. And all these matters help to consider whether the activity of the chartered accountant is a profession. (Various provisions of that Act is summarised). One of the important elements to be considered when the question whether a man is exercising a profession is to see whether he is a member of an organized professional body with a recognised standard or ability enforced before he can enter it and a recognized standard of conduct enforced while he is practicing it. A chartered accountant is approached by his client for advice and guidance in his problems with regard to trade, business and industry, and it is expected that the chartered accountant, to the best of his ability, would be in a position to help him in his difficulties and not betray and confidence that is placed in him. This is one of the elements which should be sought when considering whether a particular person is practicing a profession or is merely doing a business. A chartered accountant who has under him for training articled clerks has to form an independent judgment upon the personal intelligence and skill and in the formation of the judgment and advice, the articled clerks have no place. Therefore, their co-operation with the chartered accountant is checking receipts and payments is not the sort of cooperation which will reduce what is essentially a profession to a commercial venture.” 18. It is therefore clear from the aforesaid decisions that chartered accountant’s avocation is a profession and it has been recognized by the Chartered Accountants’ Act, 1949 that chartered accountants are practicing the profession, for the regulation of the profession, it was necessary to establish an institute of chartered accountants and thus it has now been statutorily recognized that the activities of a chartered accountant are not a mere business or trade but a profession which is also clear from the various provisions of the Chartered Accountants Act, 1949. Therefore, to conceive of the profession of the chartered accountant as coming within, the ambit of the word “shop” is not permissible having regard to the fact that the avocation of chartered accountant has been recognized as profession. Therefore, to conceive of the profession of the chartered accountant as coming within, the ambit of the word “shop” is not permissible having regard to the fact that the avocation of chartered accountant has been recognized as profession. In the light of the interpretation given by the Apex Court to the word “shop” in the case of ‘The Commissioner of Income-Tax, Andhra Pradesh v. M/s. Taj Mahal Hotel, Secunderabad’, a chartered accountant firm by the nature of its function cannot be brought within the fold of “shop”. 19. As far as the argument of Sri.Narsimha Holla for ESI Corporation, that though the avocation of chartered accountants is now deemed to be a profession, yet from the point of view of the employees, still can be considered as coming within the purview of the “shop” is concerned, no doubt the ESI Act being a beneficial legislation, it will have to be liberally construed so as to extend the benefit of the Act to as many persons as possible. Having said this, I hasten to add that unless the firm concerned comes within the word “Shop”, merely because of number of persons are engaged by the chartered accountants’ firm, that itself will not be scope to extend the term ‘shop’ to the firm of chartered accountants. No doubt, as rightly argued by the learned counsel for ESI Corporation, if the chartered accountants’ firm is not brought within the word “shop”, the persons employed by the said firm would not come within the scope of ESI Act and would be deprived of the ESI benefits. Acceptance of this argument would mean that the chartered accountants’ firm will have to be divided into two halves viz., chartered accountants themselves as one not falling within the word “shop” and its employees, for the purpose of ESI Act as coming within the word “shop”. Such an interpretation of the word “shop” in my opinion is impermissible for more than one reason. 20. The first reason is that the existence of the employees separately from the firm cannot be conceived of and as such when the Chartered Accountants’ firm itself is not a ‘shop’ so as to attract the provisions of the ESI Act, the question of the Act being applicable to the employees of the firm does not arise. 20. The first reason is that the existence of the employees separately from the firm cannot be conceived of and as such when the Chartered Accountants’ firm itself is not a ‘shop’ so as to attract the provisions of the ESI Act, the question of the Act being applicable to the employees of the firm does not arise. To give an analogy, unless the door is open, access to the inside of the house is not possible. Similarly, when the applicability of the Act to the Chartered Accountants’ firm itself is ruled out on account of the firm not falling within the definition of ‘shop’, accessibility to the employees is therefore an impossibility. 21. The second reason for not accepting the argument of Sri.Narasimha Holla is that even in the case of Lawyer’s firm, apart from the number of persons engaged to do various ancillary jobs, yet the whole activity of the lawyers’ firm comes within the fold of professional activity and as such though the employees working in a lawyers’ firm do not have the benefit of the ESI Act being made applicable to them, that itself is not a ground to treat the firm of lawyers as a shop for the purpose of implementing the ESI Act to the employees engaged in a lawyers’ firm and treat the lawyers separately as a profession. 22. This view of mine is also supported by a decision of Apex Court referred to by the learned Sr. counsel for he appellants in the case of ‘V.SASIDHARAN v. M/s. PETER & KARUNAKAR & OTHERS’ ( 1984(2) L.L.J. 385 ). The Apex Court, while considering the question as to whether firm of lawyers come within the ambit of Kerala Shops and Commercial Establishments Act, 1960, has held that the office of the lawyer or the firm of lawyers is not a shop within the meaning of Section 2(15) of the Act in question, and went on to observe that whatever may be the popular conception or misconception regarding the role of today’s lawyers and the alleged narrowing of the gap between the profession on the one hand and a trade or business on the other, it is trite that traditionally lawyers do not carry on a trade or business to customers. The concept as well as the phraseology of the definition of “shop” is inapposite in the case of Lawyers’ office or the office of the firm of lawyers. 23. Observing to the above effect, the Apex Court also considered the arguments concerning the coverage of the employees working in the lawyers’ firm and observed thus: .“We are quite solicitous about the welfare of those who work in the lawyers’ offices. But, there are many other ways in which their welfare can be ensured. If the current trends are any indication and if old memories fail not, the earnings of Lawyers’ clerks cannot, in reality, bear reasonable comparison with the earnings of employees of commercial establishments, properly so called. They, undoubtedly work hard but they do not go without their reward. They come early in the morning and go late at night, but that is implicit in the very nature of the duties which they are required to perform and the time they spend is not a profitless pastime.” 24. As in the case of the lawyers’ firm and the employees engaged by the lawyers’ firm so also in the case of a firm of chartered accountants, the very same logic can be extended even as regards persons working in the chartered accountants’ firm. Merely because of number of persons being employed in a chartered accountants’ firm, that itself does not give room to take the view that from the point of view of the employees, the firm of chartered accountants will have to be treated as a shop. In my view, such an argument is also contrary to the principles laid down by the Apex Court in the aforementioned case. For the above reasons, the appellant - chartered accountants’ firm cannot be brought within the meaning of the word “shop” so as to make the ESI Act applicable in the appellant’s firm. 25. Notwithstanding the above conclusion, let us also consider the evidence from the point of view of number of employees engaged by the firm. For the above reasons, the appellant - chartered accountants’ firm cannot be brought within the meaning of the word “shop” so as to make the ESI Act applicable in the appellant’s firm. 25. Notwithstanding the above conclusion, let us also consider the evidence from the point of view of number of employees engaged by the firm. It was contended by the learned counsel for the ESI Corporation that during the months of June 2004 there were 34 employees and except one employee, 33 employees were drawing salary less than Rs.7,500/- p.m. and as such liable to be covered under the ESI Act, having regard to the coverage limit and also referred to the evidence indicating that there were 20 persons employed during October 2004 whose salary was less than Rs.2,500/- p.m. and there were 23 employees during the month of November 2004 getting the salary of less than Rs.11,500/-. p.m. 26. The preliminary inspection report submitted by the ESI Inspector as per Ex.R-9 mentions that during the month of June 2004 there were 19 employees plus one security personnel and the evidence on record also indicates that the security personnel was not an employee of the chartered accountants’ firm but was engaged by the building owner since a number of offices are situated in the said building, and as such the question of there being 20 employees during June 2004 does not arise. Consequently, the decision referred to by the learned counsel for ESI Corporation viz. ‘Employees State Insurance Corporation v. R.K.Swamy and others’ ( AIR 1994 SC 1154 ) cannot be made applicable to the case on hand, as we are concerned with a case involving the profession of chartered accountants and not with a case of an advertising agency. Thus, from the factual angle as there were less than 20 employees during June 2004, the question of the notification dated 5.1.1995 being applicable to the appellant’s firm does not rise. 27. In the result, I pass the following ORDER Appeal is allowed. Impugned order of the ESI Court is set aside and so also the two notifications under which the appellant firm was sought to be covered and contribution was sought to be recovered from the appellant.